UAE's oil revenues to cross $100b

Abu Dhabi: The official selling price (OSP) of Abu Dhabi crude oil grades from January to June this year averaged $108.32 per barrel, a whopping 73.6 per cent rise on the year in line with soaring global oil prices.

Should the price momentum of the first-half of the year sustain in the second half, the UAE's oil export revenues are poised to race past the record $100 billion mark in 2008.

Oil prices surged past the $147 mark per barrel earlier this month, a new record high, despite Saudi Arabia pledging to pump more oil into the market to dispel fears of a supply shortfall.

Latest data from the Abu Dhabi National Oil Company (Adnoc) show that the average price of its crude grades - Murban, Lower Zakum, Umm Shaif and Upper Zakum have risen consistently month on month this year with their prices averaging $132.28 per barrel in June, $124.1 for May, $107.85 for April, $100.81 for March, $93.83 for February and $91.06 for January.

The average price of Adnoc's crude grades for January-June 2007 was $62.39.

Abu Dhabi's production accounts for nearly 94 per cent of the UAE's crude oil output. The UAE's current oil output averages 2.66 million barrels per day.

According to the UAE Central Bank, the country's oil exports in 2007 were valued at Dh261.42 billion, up 22.5 per cent on year.

The average price of the UAE's crude in 2007 was $71.70 per barrel, 12.9 per cent higher than the 2006 average price of $63.53 a barrel.

The UAE's proven oil reserves of 97.8 billion barrels make up 7.9 per cent of the world's total reserves.

Local economists say the government should invest the burgeoning oil income to secure the future generations of the country.

"The surplus money could be invested inside the country in definite projects or outside the country through the Abu Dhabi Investment Authority," said Mohammad Amerah, an Abu Dhabi-based economist. "For sure, there will be a surplus in the next year's budget," he added.

Economist Mohammad Al Asoomi, said that over the last four years, thanks to the soaring oil export revenues, the UAE government has been able to invest substantial amounts of money in improving infrastructure and has also invested in overseas markets.

"The surplus has been there for years and has been used very successfully. The money has been used to improve airports, seaports and roads. The economy in general, has flourished. The government should continue to invest the oil income within and outside the country," said Al Asoomi.

The UAE's oil would last 92 years at current production levels, latest estimates show.

The UAE's sustainable crude production capacity could rise 9.12 per cent to 3.11 million bpd by 2013. At present, oil is being produced at only 18 of the 67 potentially known fields in the UAE.